2. (50 points) Suppose Johns is 62 and is making a...
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2. (50 points) Suppose Johns is 62 and is making a retirement decision. His annual labor earning is $50,000, interest rate is 0%. Suppose he is short-sighted and only cares about things in the next two years. So, he can choose to retire at age 62 or at age 63 (he has no other choices because he is not thinking of it). a) Suppose the yearly social security benefit when he retires at age 62 is 10,000. What is the total financial income (labor income + social security benefits) if he retires at age 62? b) Suppose the yearly social security benefit when he retires at age 63 is 12,000. What is the total financial income (labor income + social security benefits) if he retires at age 632 c) Suppose one year of leisure worth $30,000 for John, will he retire at age 62 or 632 d) Now suppose his annual labor earning is 30,000, everything else equal, will he retire at age 62 or 632 c) From the above questions, do you think high-income or low-income workers will retire earlier? Why
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